Final answer:
We pay taxes to fund government services, which are essential for society's functioning. Taxes support public services, aid in income redistribution, and help manage the economy; without them, the government cannot operate effectively.
Step-by-step explanation:
We pay taxes because they are essential for the government to carry out its functions. Without taxes, the government cannot function properly as these funds are used for various public services like maintaining infrastructure, enforcing safety regulations, supporting the military, and providing disaster relief. Taxes are also used to redistribute income and ensure a fairer society. Moreover, tax revenues help in managing the economy by steering it in the desired direction through resource allocation, affecting productivity and growth.
It's important to note that if economic conditions worsen and tax revenue declines, the government may end up borrowing money, which could further impact the economy. To prevent such situations, countries often coordinate their tax policies; an example being the agreement for a global minimum corporate tax by the G-7 nations. However, political corruption or mismanagement can also lead to a shortfall in revenue, hampering the delivery of services.